GLOBALISATION PERSPECTIVE

Transformation from national and regional markets into global market without national boundaries Free Flow envisaged among WTO member countries includes goods, services, technology, Foreign Direct Investment, human-capital and Intellectual property However, regional trade blocks like EU, ASEAN, NAFTA, GCC and MERCOSUR polarise world trade and commerce, limiting market access for India based companies, since India is not a member of any of these trade blocks

Emerging Opportunities from Outsourcing Merchandise, Goods, Components for Indian Companies
Outsourcing annual opportunity in Europe alone is estimated at over US $ 250 Billion and in Asia US $ 300 Billion A) Computer Software & Solutions o A recent McKinsey & Co./ NASSCOM report has estimated Indias potential for exports of I.T services & software at US $ 31 Billion by 2008 B) Technology Services o India with its brainpower of engineers, technologists and other professionals is eminently poised to offer specialised technology services in high technology specialised areas like Contract Research

Emerging Opportunities from Outsourcing Merchandise, Goods, Components for Indian Companies
C) IT Enabled Services
o

The recent McKinsey & Company/ NASSCOM survey on worldwide potential of IT Enabled Services at US $ 142 Billion by 2008

D) Hospitality Sector Services

o

Several service areas like reservations & Accounting Services could be outsourced to Indian Companies.

E) Medical Services
o

Hospitals are poised for opportunities in the areas of administration, nursing, pharmacy, physiotherapy, respiratory therapy & biomedical engineering services
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Building Global Competitiveness - Safeguards in International Business

Prudent choice of customers, suppliers, shipping agents & business associates Use of credit rating services for client evaluation

Risk cover for countries with political/ economic uncertainty

Total compliance with & documentation for all statutory requirements Forex Risk cover for exports & imports Watchdog like monitoring of each export/ import./ international business transaction till financial & statutory closure
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Major Challenges for Indian based Companies

A) GLOBAL UNCERTAINTIES & RISKS

A cost effective & comprehensive risk cover for :

o o o o

country risk in terms of political & economic risk currency risks the client risk distribution/ logistics risk for emerging markets

Impact of perils like theft, pilferage, accidents/ mishaps for cargo gets magnified in case of developing countries due to longer supply chain/ uncompetitive logistics and inadequate distribution and other infrastructure
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Major Challenges for Indian based Companies

B) LOGISTICS & INFRASTRUCTURE

Indias infrastructure in terms of roads, ports, airports, storage facilities at ports and airports including for inflammable cargo as also cold storages in transit and at shipment points is inadequate compared to Indias leading competitors like U.S, European countries, Singapore, Hong Kong, Japan, Taiwan & S. Korea. This results in higher freight costs and longer delivery.

C) R&D AND TECHNOLOGY NOT IN TUNE WITH GLOBAL TRENDS

Innovation and technology are key business drivers for long term success.
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Indias Economic & Industrial Perspective in the 1950s & 60s

India is a planned economy envisaging co-existence of public sector, private sector & co-operative sector
The focus immediately after our independence was on self-reliance through import substitution. Substantial investments were made by the Government in the public sector for basic industries like steel & fertilisers

Indias Economic & Industrial Perspective in the 1950s & 60s, Contd

This focus on industrialisation was necessary then as India in 1947 was only an exporter of raw materials like iron ore & agrocommodities like cotton
The protected industrial environment of the fifties & sixties by way of industrial licensing and quantitative restrictions and tariffs on imports nurtured an inward looking private sector with fragmented capacities There was no necessity or incentive for exports in view of sufficient demand in the protected Indian market, which virtually shut out all but essential imports
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Indias Economic & Industrial Perspective in the 1970 & 80s

Industrial development & technology up gradation in India made significant strides including through transfer of technology from abroad by way of technical collaborations and joint ventures.

However, the capacities in the private sector continued to be fragmented due to the MRTP Act, which inhibited Indian corporate sector from planning global scale operations even in sectors with comparative advantage for India
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Indias Economic & Industrial Perspective in the 1970 & 80s, Contd

For the first time exports began to be recognised by the Government as important in view of the foreign exchange requirement for Indias essential imports like petroleum products, fertilisers, edible oil and high tech engineering products & services Export house scheme introduced in early seventies followed by trading house scheme in1978 for the first time encouraged merchant exporters recognising their ability in effectively reaching foreign shores for promoting Indias exports
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Indias Liberalisation during early 1990s & the WTO Mandate

With the introduction of economic reforms in India in 1991, Indian economy has opened up to the world economy, thereby changing significantly industrial and competition scenario in India

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Indias Liberalisation during early 1990s & the WTO Mandate, Contd

Competition within India increased significantly due to inflow of foreign investments & technology and creation of additional capacities with current generation technology from abroad during the late nineties The Indian industry & commerce recognised at the turn of the millennium that WTO mandated free trade by 1/1/2005 means survival of the fittest & gearing up for global competition a necessity
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BUSINESS ENVIRONMENT IN INDIA TODAY

Ongoing Economic Reforms Services Sector opening up India proactively seeking Regional and Bilateral trade agreements

Continuing encouragement for international trade and investments

Higher disposable income leading to rising consumer expectations

Industry buoyant

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SOURCES OF INDIAS COMPARATIVE ADVANTAGE

Strategic location Long coastline Climate Rich in natural resources Large tracts of agricultural and forest lands Large and diverse livestock population Strong Human Resources base
o o o

Large and rising middle class Large pool of qualified and competent English speaking professionals Inexpensive Human Resources

Cultural diversity and heritage Scenic beauty

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Opportunities For Improvements - INDIA

Infrastructure Commercial Services Industrial Culture R&D/Technology below the level of global leaders
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In Todays Global Environment, young professionals like you need

A global mindset & global perspective Fluency in one or more foreign languages like French, German, Arabic, Chinese, Spanish Familiarity with cultures of important markets Familiarity & in-depth understanding of international standards like UL for U.S & BS for U.K & Commonwealth countries & certifications like ISO In case of Accounts/ Finance professionals, in-depth understanding of GAAP & international accounting norms & trends Above all, be a lifelong learner & continuously upgrade your skills & knowledge through continuing education
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